Pages

Friday, July 31, 2009

Telesat HQ Likely to Remain In Ottawa Just Down the Street from Golf Course

The scientists and executives at global satellite services provider Telesat must like golfing because they certainly don't seem to appreciate recent Canadian satellite and business regulatory initiatives.

According to this July 23rd report on the website Tech Media Reports (a subscription news service focused on the Canadian communications industry), Telesat President and CEO Daniel Goldberg has indicated that the firm has no intention of pulling its Ottawa headquarters and research division out of Canada if the government introduces auctions for satellite orbital slots.

The report comes only one month month after this June 24th report from the same service which stated:

Telesat Canada warns it may leave Canada for countries with more hospitable regulations if Industry Canadamoves forward with a proposal to use auctions to assign future satellite orbital slots and spectrum.

The 40-year-old Ottawa company complains it already pays 10 times the amount for satellite spectrum licences than do its US counterparts.

These press releases seem to be essentially political posturing over Industry Canada's Gazette Notice DGRB-001-09 under the Department of Industry Radio Communication Act, published in April 2009, which seeks feedback on the possibility of using auctions to award licenses to operate Canadian satellite services.

The formal Telesat response, dated July 15th and signed by Mr. Goldberg, provides a more measured reply to the Gazette notice but also indicates that:

Telesat notes the unanimous opposition to satellite spectrum auctions from those representing the satellite industry. In addition to Telesat and the CSSIF (whose comments were endorsed by Telesat), the S1A and Ciel also expressed strong opposition to satellite spectrum auctions.

All commenting parties involved in the satellite industry cited the following reasons why auctions of satellite spectrum would be inappropriate:

Auctions are inconsistent with the international nature of satellite communications and international practice

Auctioning of satellite spectrum by Industry Canada could disadvantage Canadian operators and have a deleterious impact on the Canadian economy

Auctioning of satellite spectrum would not promote spectrum efficiency

Ciel has also pointed out that auctioning of satellite spectrum would be inconsistent with the Department's own Framework for Spectrum Auctions and that the paucity of potential bidders and the amount of satellite spectrum available are inconsistent with the economic arguments normally advanced to support spectrum auctions.

Both SLA and Ciel noted that diverting resources to auction fees would reduce those available for capital investment in the satellite networks themselves, ultimately reducing the benefits of satellite connectivity to the population as a whole.

Why is this debate even going on? That's simple: we're running out of orbits to launch satellites into.

With satellite operators around the world looking to gain an edge in terms of offering new services, access to real estate is vital. However, with most of the so-called hot orbital slots taken, what opportunities remain for satellite operators to develop new positions or make better use of the existing slots?

Industry Canada, fully aware of the problem has simply opened the debate as to the appropriate method to allocate the existing Canadian orbital slots, which are provided through the International Telecommunications Union (which officially allocates orbital slots to nations only and not directly to satellite operators or other private corporations).

Telesat, although unhappy with the idea of auctioning off Canadian orbital slots is aware that this is only an initial move in a long process and has decided that it's not yet prepared to move corporate headquarters somewhere else, at least until the final offer is tabled.

The PCW project is designed to facilitate Canadian operations in the north and support Canadian sovereignty by providing reliable and continuous space-based communications services and timely meteorological information.

As presently structured, the mission would consist of two satellites in Molniya-type orbits, supported by one northern ground station and connected to communication satellites in geosynchronous orbit with other connections to various portions of the telecommunications infrastructure in order to assist with tracking, identification and analysis.

The specific contract announced on Thursday is to develop the preliminary knowledge necessary to proceed towards the next phase.

Here is one comment from a person who states quite unequivocally that:

Although, in a literal sense, it may be true that there are no dedicated programs, it is effectively quite an inaccurate comment. The CSA supports many small companies through a series of procurement opportunities.

In fact, it is interesting that one of the first highlighted examples of technology in the Near Earth report is the Neptec Space Vision System that is used in the Shuttle program and which was funded by the CSA. Although the big CSA funding goes to the major companies like MDA, the majority of the contracts are awarded to small and medium sized companies. Hopefully, someone at the CSA will offer a rebuttal to the Near Earth report.

The commentator goes on to list a number of CSA programs that “allow small companies to obtain funding, along with the bigger companies.” They include:

The various Canada - ESA Programs, which allows Canadian companies to participate in ESA led initiatives offset with CSA funding.

I understand where the reader is coming from when he states that “typically, although the major procurement contracts may be awarded to a large company to manage and lead, they most often include a number of subcontracts to smaller companies” and these subcontracts help to sustain and grow small business every bit as much as the more formal programs administered through NASA and the ESA.

But I also can’t help but note that he categorizes the comment from the report about CSA providing no dedicated programs for small aerospace firms as being true in “a literal sense.”

So how do real small business space subcontractors feel about this state of affairs? Does CSA do enough to nurture and grow small aerospace businesses through the existing process?

The floor is open for questions, queries, statements of concern or support and general comments.

Tuesday, July 21, 2009

It's been forty years since Apollo 11 landed on the Sea of Tranquility and it looks like we all sometimes get it wrong when it comes to predicting the future.

For example, here's Tom Lehrer, best known for the pithy, politically tinged and humorous songs he recorded in the 1950s and 60s, as he sings about one of the icons of our first great space age.

In only two and a half minutes, he manages to make fun of the space program and its military connections, nuclear Armageddon, America's sense of self-superiority, heroes in general, the Nazi's in particular and even bureaucrats. It's interesting to note how almost everything in the song is still relevant (and some of us rocket focused people might still want to consider learning "Chinese").

It is also a good reminder that those who led mankind to the Moon forty years ago were stubborn individualists and opportunists who embraced risk, endured setbacks, knew failure and were not universally loved or even terribly well respected in life but who continued forward anyway to accomplish unique and amazing things.

Here's a second example from the Atomic Rockets website (under the section devoted to space stations) to remind us that even the architects of our greatest accomplishments were not always totally correct about how things were going to turn out:

And it was going to be a beauty of a space station, too. Three decks, 250 feet in diameter, and a crew of fifty. Makes the ISS look like a tin can. This outpost in space was where the Lunar expedition fleet would be constructed.

It would pay for itself as well. Meteorologists could plot the path of storms and predict the weather with unprecedented accuracy. Radio and TV signals could be transmitted all over the globe. Not to mention observing the military activities of hostile nations.

Why was this marvel never constructed? Because some clown invented the printed circuit.

Freed from the tyranny of fragile and short-lived vacuum tubes, technologists could make unmanned satellites for meteorologists, radio and TV signals, and watching hostile militaries. Such satellites could be assembled and launched at a fraction the cost of a manned station. They also did not require constant resupply missions to keep the crew alive.

We're at the beginning of our second great space age and many are wondering what it will turn out to be like, who will end up as our next generation of heroes and what they'll be remembered for.

The panel, moderated by Virendra Jha (then VP Science, Technology and Programs for the Canadian Space Agency) also included Mag Iskander (then Executive VP and General Manager Space Missions for Macdonald Dettwiler and Associates) and quite a few other major figures in aerospace so it's amusing to note how the participants each act amazed at the things that have happened over the last twenty years, then marvel at how most of it was unexpected but then state unequivocally that the market has likely stabilized and will now remain essentially the same (with one or two predictable exceptions which are logical progressions of existing trends).

Other European agencies (such as the French CNES, the German DLR and the Italian ASI) also provide programs for small aerospace businesses such as the NAVOBS PLUS program, various RTD programs for space service infrastructure and the SME Working Group and Commissioner (through the DLR only).

But taken together, this listing of space activities and small business programs (available on page ten of the report) provides a useful list of avenues of improvement for the CSA to explore as it moves forward with its (evidently ongoing) update of Canadian Space Policy.

To its credit, the CSA is sited for its microsatellite missions (such as NEOSAT) and "opportunities for small science platforms" which can be contracted to small aerospace businesses to provide a revenue source.

The report makes it clear that small aerospace companies cannot be ignored and states that, "although the aerospace industry is dominated by a small group of large companies, there is a sizeable and diverse universe of small aerospace companies engaged in space activities. These smaller aerospace companies are engaged in all elements of the value chain and provide critical and innovative components, subsystems and mission services to large prime contractors as well as to end user operators."

Someone in the CSA should either respond to this report or use it as a template for improvements.

Thursday, July 16, 2009

A Two Stage Boost for Odyssey Moon

Google Lunar X-Prize contender Odyssey Moon, a newspace company with a strong Canadian connection, seems poised to benefit from two important announcements today.

The first boost is the announcement by Odyssey Moon Founder and CEO Dr. Robert Richards and Chairman Dr. RaminKhadem that several well respected international firms have joined the Odyssey Moon "corporate team" to assist with the firms quest to "become the first private company to provide payload and delivery services to the Moon" according to this press release posted on the NASA Commercial Space Watch website.

The new partners are as follows:

Near Earth LLC, an investment bank specializing in satellite, media and telecom properties.

Ad agency The Brand Union, a member of the WPP group of companies, one of the six largest marketing and communication companies in the world.

The press release also announced the addition of veteran investment banker Carol Goldstein to the Odyssey Moon executive. With 25 years experience on Wall Street financing commercial satellite and telecommunication projects, Ms. Goldstein will focus on fundraising activities.

These items cannot help but be perceived as beneficial to Odyssey Moon and a solid base for consolidation of the business structure preliminary to moving forward with the actual hardware development.

"...involved a detailed examination of the 19 teams already registered in the competition, as well as a robust analysis of potential lines of business, identified six key market areas: hardware sales to the worldwide government sector, services provided to the government sector, products provided to the commercial sector, entertainment, sponsorship, and technology sales and licensing.Taken together, the study projects the value of these markets to be between $1 - $1.56 billion within the next decade. Additionally, some Google Lunar X PRIZE competitors have set their sights on additional market sectors that fell outside of the scope of the Futron report, which could result in an even higher total market size."

Futron has also written well recieved white papers and reports on space tourism, and the satellite industry in the past so this second boost of the day should go a long way to simplifying Ms. Goldsteins new job at Odyssey Moon, which is to raise money for their Google Lunar X-Prize attempt.

Odyssey Moon lists it's official HQ as being in both the US and the Isle of Man (with a Canadian subsidiary) while the PlanetSpace HQ is presently in Chicago.

Why is this so?

According to Michael E. Porter, author of the book "Competitive Advantage of Nations" like minded individuals and businesses focused in similar areas tend to "cluster" into groups of interconnected firms, suppliers, related industries, and institutions that arise in specific geographic locations because of a common need for talent, technology and similar infrastructure

Since both companies sited as examples have incorporated within the US, the logical assumption is that relocating into the US "cluster" has allowed both these firms to more effectively compete with Canadian and other non-US focused businesses.

But this initial conclusion might not be entirely fair given that Odyssey Moon also lists incorporation in the second jurisdiction on it's website at www.odysseymoon.com. In fact, it seems quite common for newspace focused firms to have multiple incorporations across national jurisdictions with the intent to qualify for as many regional tax credits as possible.

But building a tax structure allowing multiple incorporations under different jurisdictions simply won't create "clusters" of excellence by itself because building competitive advantage takes more than simply having suitable tax structures which anyone, even an offshore entrepreneur, can take advantage of.

In essence, there can be no cluster without a physical presence and the ability to interact with other local players.

Porter agrees and states "increasingly, competitiveness is no longer a government driven process. It's a process where government and business and universities and other institutions work together to raise the bar in terms of productivity and all of them are contributing. All of them have to be players."

So we need to do more than fiddle with the tax system in order to build an national industry. We also need to take steps to encourage people to physically locate their businesses in Canada to help build "clusters" or physical repositories of talent, knowledge and useful skills.

This document provides a fascinating history of the SR&ED tax credit form program implementation in 1986 (when it replaced the earlier Scientific Research Tax Credit) to 1995 along with a useful outline of what actually happens when tax change is contemplated and an inventory of who really does need to be consulted for the process to be successful (it also contains a bit on why the earlier policy was changed).

One other thing to note is that “true believers” in the commercial potential for space like Richard Branson, and Bob Richards don’t need government incentives to invest their time, effort and money in space focused companies although they may utilize business strategies allowing for the maximization of tax credits across national borders as part of standard due-diligence.

As for the rest of us, no one yet knows how large the tax credits need to be in order to attract the interest of more conventional investors to the newspace arena.

This annual event is dedicated to developing a wider understanding of the diverse space exploration and development projects undertaken by Canadians and helps foster collaborative connections between the government agencies, businesses, organizations and space advocates involved.

The focus this year is on the concept of "dual use" technology which has traditionally referred to technology used for both military and civilian aims but also describes the multiplicity of terrestrial problems, research applications and collaboration opportunities that space focused solutions can assist with.

Space Commercialization: including regulatory and financial issues surrounding the "dual use” theme, such as utilization of industrial and regional benefits (IRB) to drive ongoing, and multiple use sales, "dual use" of military space focused technologies, and export controls for “dual use” products.

Education and Training: including elementary, secondary and post-secondary programs, student participation in space missions, the role of government and industry, new roles for educational institutions, and communication of space activities to the public.

On top of hosting the Space Summit and other events, members of the Canadian Space Society often provide commentary for news outlets on space related events as witnessed by this recent CBC Newsworld interview with society member Talmon Firestone.

For more information, to register, and to submit a title and abstract for a presentation, please visit www.css.ca.

Ever since, the phrase has been endlessly misquoted (mostly by people who don’t remember George Santayana) or paraphrased (Clarence Darrow once said “History repeats itself. That’s one of the things wrong with history”).

Our present space age (measuring from Sputnik) is scarcely sixty years old and some argue that not enough time has elapsed to draw any conclusions or provide appropriate comparisons between our present and previous ages.

Fortunately for those of us who remember Santayana, here are two authors focused on our present space age but still well aware of relevant history.

Our first author, Eva-Jane Lark is Vice-President and Investment Advisor with BMO Nesbitt Burns, one of Canada’s largest full-service investment firms and this makes her a rarity for a Canadian space advocate because of her ability to assess the business case for space entrepreneurship (important since most space focused entrepreneurs seem to be engineers or scientists).